Obama administration ignores eco-radicals, approves another natural gas export terminal

posted at 4:41 pm on March 24, 2014 by Erika Johnsen

Before today, the Obama administration had only approved six of the more than two dozen pending permit applications for natural gas export terminals for countries with which we do not already have free-trade agreements. In just the past few months, however, the Obama administration has tentatively signaled that they are finally ready to really recognize the boon the recent shale gas bonanza has been for boosting the economy as well as consider the potentially helpful long-term geopolitical benefits that could be reaped from allowing our domestically produced oil-and-gas to flow more freely into the world market — and even of the face of some very vocal opposition last week from united green groups lobbying for an export ban in the hopes of keeping more of America’s oil and gas permanently in the ground, the Obama administration went ahead and announced another approval on Monday. It isn’t enough to quite call it a definitive trend, but their lately accelerated pace of approvals could mean that they’re ready to talk the talk and walk the walk, via The Hill:

The Energy Department said Monday it has “conditionally” authorized the planned Jordan Cove liquefied natural gas (LNG) terminal to export natural gas to countries with which the United States does not have a free trade agreement.

The Jordan Cove project in Coos Bay, Ore., is the seventh natural gas export terminal to get conditional Department of Energy (DOE) approval. Only one project has final approval from the federal government, and it will not start exporting natural gas until late 2015. …

“The Energy Department conducted an extensive, careful review of the application to export LNG from the Jordan Cove LNG Terminal,” the agency said in a statement. “Among other factors, the department considered the economic, energy security, and environmental impacts,” it added, saying that approval of the terminal “was not inconsistent with the public interest.” …

Sen. Lisa Murkowski (R-Alaska), ranking member of the Energy and Natural Resources Committee, welcomed the department’s decision.

“Given the situation in Ukraine, this license sends a positive signal to our allies and to energy markets that the United States is ready to join the growing global gas trade,” Murkowski said in a statement. “While this license moves us in the right direction, I would be strongly opposed to any ‘pause for further study,’ as some have proposed.”

Of course, the Obama administration is still calling natural gas a “bridge fuel” so as to at least appear sensitive to green groups’ quixotic and self-impoverishing ambitions to quickly transition all of humanity to an all-renewable energy scheme, and they have plenty of heavy-handed regulatory schemes in the works that are working against the grain of economic growth in the energy sector, but the eco-radicals are getting less and less patient with what they feel has been the Obama administration’s mealy-mouthedness on climate change. A.k.a., their at least semi-acknowledgement of reality that doing away with fossil fuels just because you feel lie it… is just not gonna’ happen.

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Good thing that it is already built, doubt the Oregon eco whack jobs would let them build one from scratch.

major dad on March 24, 2014 at 4:45 PM

Exporting NG is stupidity. It will drive up prices for US consumers and negate any manufacturing incentive lower NG prices would have.

All NG leases were negotiated when NG was imported. They should all have to be renegotiated now.

Of course Obama will approve them, they are bad for the american people.

aniptofar on March 24, 2014 at 4:47 PM

The Energy Department said Monday it has “conditionally” authorized the planned Jordan Cove liquefied natural gas (LNG) terminal to export natural gas to countries with which the United States does not have a free trade agreement.

The Jordan Cove project in Coos Bay, Ore., is the seventh natural gas export terminal to get conditional Department of Energy (DOE) approval. Only one project has final approval from the federal government, and it will not start exporting natural gas until late 2015. …

heh?

KOOLAID2 on March 24, 2014 at 4:55 PM

aniptofar on March 24, 2014 at 4:47 PM

I strongly disagree. LNG, like oil, is a fungible, global commodity. Free trade serves to make markets more efficient. If prices rise, that is merely a signal to suppliers to produce more.

This is one good thing to come out of the Russian venture in Crimea. Thank you Vlad!

MJBrutus on March 24, 2014 at 5:02 PM

aniptofar – well, yes and no.

We’ll make a lot of money off LNG exports, which will result in a stronger dollar and improved balance-of-payments and modestly lower prices in the US.

But…if we’re talking about energy security for the West, the goal should be the largest possible supply, which would mean restricting exports only to those countries that are making credible efforts to develop their own resources e.g. hydraulic fracturing of shale deposits, etc.

So if the Germans can’t muzzle their Greens they can take a flying … in a rolling doughnut.

JEM on March 24, 2014 at 5:03 PM

Of course Obama will approve them, they are bad for the american people.

aniptofar on March 24, 2014 at 4:47 PM

That is what I thought when I read this…
A.k.a., their at least semi-acknowledgement of reality that doing away with fossil fuels just because you feel lie(like?) it… is just not gonna’ happen.
If you sell it overseas the pick up in demand will raise prices here at home. The dysfunctional World Markets like Europe and Asia will cause the cost of opportunity of selling to Americans increase. The total capacity that is being requested by industry for export is 46% of total US usage today.
How many businesses will never start due to higher energy and feedstock prices (Natural Gas is used in many chemicals and plastics), how many will move overseas, how many will not expand as much as they could have with lower cost natural gas, how many new technologies will fail to materialize because higher gas prices make them uncompetitive, since when is the conservative position higher prices for American Citizens and companies?

astonerii on March 24, 2014 at 5:04 PM

Like the old DDT thing from decades ago. Banned in the US because it killed baby Bald Eagles and children. But perfectly OK to send over to deepest darkest and let them just spray the daylights all over each other.

We NEED natural gas here, in the US. We have mega-tons of it. Clean, efficient. We are in a position to set global natural gas prices. And should…after we make sure we have all we need here, for us, for our use.

But…it is a fossil fuel, thus evil, sinister, the stuff of the devil…so, let’s not capitalize on using it here…we have wind farms and solar arrays, and unicorns to meet all our energy needs, right?

Bad old nasty fossil fuels. Can’t use them here, but let’s send them overseas so the “lesser races” can surpass us in a decade or so. Sell ourselves short so we can have some sort of positive foreign “investment” to counter the lack of domestic “investment.”

/s/ <<<[That last part.]

coldwarrior on March 24, 2014 at 5:05 PM

We should be converting our trucks and cars to Natural gas, thereby making them lighter, cheaper and more fuel efficient. (Lighter b/c we eliminate all the expensive emissions equipment and greatly simplify the engine — there are no emission controls on kitchen stoves. )

We should be building a pipeline from Prudhoe Bay either to a gas terminal in AK or better yet all the way to the lower 48. Currently we pump the natural gas down into the wells to push up the crude — sort of storing the natural gas there until we need it.

KenInIL on March 24, 2014 at 5:10 PM

More NG exports to Europe will put Putin in his place. It’s the simple solution to keep Russia teetering on financial ruin. If Europe can get NG from us, we both benefit.

Deckard BR on March 24, 2014 at 5:10 PM

We NEED natural gas here, in the US. We have mega-tons of it. Clean, efficient. We are in a position to set global natural gas prices. And should…after we make sure we have all we need here, for us, for our use.

coldwarrior on March 24, 2014 at 5:05 PM

Your argument applies to any product that we export. Do you think we pay more for oranges in the US because we export oranges? Or do you suppose that rising orange prices due to increased demand (in both the domestic and foreign markets) result in producers growing more?

MJBrutus on March 24, 2014 at 5:15 PM

More NG exports to Europe will put Putin in his place. It’s the simple solution to keep Russia teetering on financial ruin. If Europe can get NG from us, we both benefit.

Deckard BR on March 24, 2014 at 5:10 PM

Europe pays $10-11 for Russian natural gas while the far east is offering $14-18. Why on earth would a company send the natural gas to Europe rather than Asia?

sharrukin on March 24, 2014 at 5:18 PM

Your argument applies to any product that we export. Do you think we pay more for oranges in the US because we export oranges? Or do you suppose that rising orange prices due to increased demand (in both the domestic and foreign markets) result in producers growing more?

MJBrutus on March 24, 2014 at 5:15 PM

Because oranges and organic decaying item is the same as natural gas, which keeps for millions if not billions of years. Same thing, no different at all.

astonerii on March 24, 2014 at 5:18 PM

Europe pays $10-11 for Russian natural gas while the far east is offering $14-18. Why on earth would a company send the natural gas to Europe rather than Asia?

sharrukin on March 24, 2014 at 5:18 PM

The sources I read was 11 to 13 per mmBTU for europe.

astonerii on March 24, 2014 at 5:20 PM

astonerii on March 24, 2014 at 5:18 PM

LNG and other fossil fuel prices are not rising because of time scales. The fact is that industry developed a new extraction technology in response to rising prices caused by increased demand. And voila, the free market responded energy prices because their was the financial incentive to do so. That is how the free market for energy works and it is how the free market for oranges work.

MJBrutus on March 24, 2014 at 5:22 PM

The sources I read was 11 to 13 per mmBTU for europe.

astonerii on March 24, 2014 at 5:20 PM

Doesn’t look like that from what I can see.

http://www.indexmundi.com/commodities/?commodity=russian-natural-gas

What was the source for that quote?

sharrukin on March 24, 2014 at 5:27 PM

LNG and other fossil fuel prices are not rising because of time scales. The fact is that industry developed a new extraction technology in response to rising prices caused by increased demand. And voila, the free market responded energy prices because their was the financial incentive to do so. That is how the free market for energy works and it is how the free market for oranges work.

MJBrutus on March 24, 2014 at 5:22 PM

That is not an answer to any of my questions or my rebuttal.

Oranges expire, they have to be grown and sold and are effectively a completely renewable resource.

Natural Gas is a non replenishing resource.

There is your difference between oranges and natural gas.

astonerii on March 24, 2014 at 5:31 PM

So if Obama is approving it, it simply means he has cronies in position to benefit and kick some of that benefit back to the Democrats, if not Obama personally in some way.

I did, in fact, read this morning that Soros had recently bought up a significant stake in an oil company that is engaged in the Texas fracking boom.

Interesting.

Midas on March 24, 2014 at 5:32 PM

No ammonia plants—which produce 90 percent of the fertilizer used worldwide—have broken ground in the U.S. in more than 20 years. But in the next three to five years, that’s changing. Today there are as many as 14 ammonia plants proposed in the U.S., with nearly 12 million tons of new capacity and $10 billion of expected investment. Several older plants are also being recommissioned and upgraded. Louisiana, Iowa, North Dakota, Texas and Indiana are among the proposed sites. This boom, driven by low prices for natural gas—the main ingredient in ammonia production—will drive a corresponding surge in the industry’s already substantial carbon footprint.

Again why do you hate American businesses that produce END PRODUCTS with value added to the raw resources?

astonerii on March 24, 2014 at 5:34 PM

Ford F-150 to Offer Ability to Run on Compressed Natural Gas; Sales of Ford CNG-Prepped Vehicles Continue Growth

Why do you hate American products? Low Natural Gas prices drive changes like these.

astonerii on March 24, 2014 at 5:35 PM

Like the old DDT thing from decades ago. Banned in the US because it killed baby Bald Eagles and children. But perfectly OK to send over to deepest darkest and let them just spray the daylights all over each other.

coldwarrior on March 24, 2014 at 5:05 PM

Actually, I believe it was banned from use ‘over there’ as well, and as a result, millions have died needlessly from malaria, etc. And the fears of it’s being deadly for birds and children, I believe, have been proven to have been unfounded all along.

Midas on March 24, 2014 at 5:36 PM

Global demand, inexpensive natural gas are increasing domestic plastic production

Why do you hate American workers?

astonerii on March 24, 2014 at 5:36 PM

CHICAGO — Cheap natural gas will have a greater impact on U.S. manufacturing over the next several years than is commonly assumed, giving the U.S. a powerful—and unique—cost advantage that will benefit a wide range of industries across the full value chain, from feedstock to finished goods. This cost advantage has already started to boost investment and employment and will persist for at least five years, according to new research released today by The Boston Consulting Group (BCG).

Why are you hell bent on ruining a good thing when it is handed to you?

astonerii on March 24, 2014 at 5:38 PM

More spending money for the Obama WH.

They can’t get it all from just taxing us. Can they?

Oxymoron on March 24, 2014 at 5:40 PM

astonerii on March 24, 2014 at 5:31 PM

You fail to understand the economics of oranges or of fossil fuels. Fossil fuels are plentiful. The challenge is extraction and, in the case of oil, refining it. When prices rise new forms of extraction become economically feasible. That and industry spends more on researching new ways to extract it. That is why we have fracking. It is why Canadians are producing oil from tar sands. There is no scarcity of fossil fuels, simply an economic challenge for producers to solve when their incentives are sufficient.

The problem is not scarcity of the resource, which is what you keep trying to get at. In the case of oranges, new technology is not needed to increase production, simply an adjustment of priorities for land and water usage. That is the difference, but such differences will apply to any exported products from steel to step ladders.

The economics are the same. Increased prices due to higher demand send a market signal to producers to increase supply which keep prices in check. Free markets including free trade are the way to create efficient economies.

MJBrutus on March 24, 2014 at 5:41 PM

The fact that all of it is sitting atop the natural-gas-rich Fayetteville shale never came up. But industry insiders are citing Big River Steel and similar projects as the result of abundant new fuel supplies. The American Chemistry Council (ACC) predicts 13,000 jobs will be created in Arkansas, 500 of those at Big River Steel. It’s touted as a key dividend of hydraulic fracturing, or fracking, and the unlocking of massive reserves in shale formations across the country. (See related “Interactive: Breaking Fuel From Rock” and “The Great Shale Gas Rush.”)


What happens when it all goes back up in price to all these good activities? This is what conservatism is about. Making America Competitive. Selling lower cost value added products will do far more for the nation than selling a raw resource overseas.

astonerii on March 24, 2014 at 5:43 PM

MJBrutus on March 24, 2014 at 5:41 PM

No, I do not fail to… I understand that each tranch of energy comes at a price point at which it is economical to bring out of the ground.

What you fail to understand, or refuse to acknowledge is that as you keep taking the lower cost tranches out of the ground all your doing is leaving the costlier ones in the ground to be dug up later. But regardless of the fact that if you are willing to pay 6 trillion dollars to get a cubic foot of natural gas out of the ground or not, every bit used is a bit not there tomorrow. Every bit costs our future generations a higher and higher cost. Why are we selling it over seas and damaging our overall economy doing so?

I know countries that rely on selling their raw resources. Few are prosperous.

astonerii on March 24, 2014 at 5:47 PM

You deliberately ignore the fact that LNG exports won’t work if they drive up domestic prices too high. You just want to stop it because you HATE america.

blink on March 24, 2014 at 5:45 PM

too high… but higher… move along.

Higher is higher. There is a pretty big range they can move up and work for the energy companies.

astonerii on March 24, 2014 at 5:49 PM

Be careful debating astornei about this. He hates American people and American businesses. He doesn’t want to see them helped by any exports at all. He wants everyone to suffer for some strange reason.

blink on March 24, 2014 at 5:43 PM

Prove your accusation!

I am all for exports. Finished end products that give the United States of America and American Workers the GREATEST benefit.

It is you who hates Americans and American Businesses. You want to increase the cost of electricity and home heating for American people and The cost of feedstock and energy for businesses driving down their competitiveness.

All you care about is your precious energy sector, the rest of America can go to hell for all you care.

astonerii on March 24, 2014 at 5:52 PM

What you fail to understand, or refuse to acknowledge is that as you keep taking the lower cost tranches out of the ground all your doing is leaving the costlier ones in the ground to be dug up later.

As I explained, the higher prices for energy provide the incentive to perform the R&D to extract it. That is why we are now fracking and why Canadians are using newer technologies on tar sands. And as a result, prices have been restored to an inflation adjusted level not far from what they used to be.

But regardless of the fact that if you are willing to pay 6 trillion dollars to get a cubic foot of natural gas out of the ground or not, every bit used is a bit not there tomorrow. Every bit costs our future generations a higher and higher cost. Why are we selling it over seas and damaging our overall economy doing so?

I know countries that rely on selling their raw resources. Few are prosperous.

astonerii on March 24, 2014 at 5:47 PM

The fault is because most of those countries lack real economies. They have state run energy industries that are their sole source of wealth. That describes most of the Mid East, Venezuela and increasingly Russia among others. Free market capitalism is the only cure for that disease.

What is more, by retaining our prosperity through extraction of fossil fuels we are performing a few other services for posterity.

1. We are buying time for technology to find new and better energy source.

2. We are bequeathing a prosperous society and the resources needed for future generations to perform the R&D they will need.

We have centuries of supply of untapped fossil fuels. We should exploit it to preserve freedom and prosperity and to perform R&D on what comes next.

MJBrutus on March 24, 2014 at 5:59 PM

MJBrutus on March 24, 2014 at 5:59 PM

Is natural gas an inexhaustible resource?

astonerii on March 24, 2014 at 6:02 PM

astonerii on March 24, 2014 at 6:02 PM

Did I or anyone base on an argument on it being so?

Malthus may be proven right some day. But he will not be vindicated by the fossil fuels sector anytime over the course of the next century.

MJBrutus on March 24, 2014 at 6:04 PM

What is more, by retaining our prosperity through extraction of fossil fuels we are performing a few other services for posterity.

1. We are buying time for technology to find new and better energy source.

2. We are bequeathing a prosperous society and the resources needed for future generations to perform the R&D they will need.

We have centuries of supply of untapped fossil fuels. We should exploit it to preserve freedom and prosperity and to perform R&D on what comes next.

MJBrutus on March 24, 2014 at 5:59 PM

We already do extract our energy, for our needs.

We have longer to buy time if we do not sell the stuff overseas.

A prosperous society creates things, not simply extract them to give to others to make them for us.

Nothing you say improves your argument. Unless you can make the argument that natural gas, for all intents and purposes is inexhaustible over the next 200 years or more and that the exportation of a starting amount equal to 46% of current US usage amounts will not drive the price up you fail.

Not over extracting in order sell overseas does everything that your argument does, but it only does it better.

astonerii on March 24, 2014 at 6:07 PM

Is natural gas an inexhaustible resource?

astonerii on March 24, 2014 at 6:02 PM

I ask you, seriously, to use the intertubes and search for public service announcements (PSAs) put out by the Ad Council, and for other advertising of the 1970′s that made the same argument you’re making now.

Watch them, and then come back here and make your points again with a straight face. Your argument is at least 40 years old, and wrong.

BobMbx on March 24, 2014 at 6:10 PM

This is another one of your hateful comments. You have no problem with coal exports despite the fact that coal isn’t an inexhaustible resource either.

You keep pretending that we don’t have much natgas because you just want to advance your anti-patriotic agenda.

You also deliberately ignore the realities of unconventional hydrocarbons which has already been explained to you.

blink on March 24, 2014 at 6:04 PM

We know we have well over 200 years of supply of coal. That is without having looked for new resources of it for really decades. Coal is already being exported, thus nothing I can do about, the infrastructure already exists and has been paid for.

astonerii on March 24, 2014 at 6:10 PM

I ask you, seriously, to use the intertubes and search for public service announcements (PSAs) put out by the Ad Council, and for other advertising of the 1970′s that made the same argument you’re making now.

Watch them, and then come back here and make your points again with a straight face. Your argument is at least 40 years old, and wrong.

BobMbx on March 24, 2014 at 6:10 PM

How about a no to that?
Again, why do you hate Americans and the American worker so much you want to work against one of their few competitive advantages of the last decade?

astonerii on March 24, 2014 at 6:12 PM

Unless you can make the argument that natural gas, for all intents and purposes is inexhaustible over the next 200 years or more and that the exportation of a starting amount equal to 46% of current US usage amounts will not drive the price

astonerii on March 24, 2014 at 6:07 PM

I don’t know about NG specifically, but I have seen very credible estimates indicating that known fossil fuel reserves are sufficient to meet worldwide demand over such a time frame.

At present, much of these reserves are not economically feasible to recover. However, that could have been said just a decade ago of the copious supplies that we are now exploiting due to fracking. So, the fuels are there, it is a matter of the incentives to produce from it.

MJBrutus on March 24, 2014 at 6:13 PM

From Live Science:

Fossil fuels are formed from the remains of plants and animals that died hundreds of millions of years ago, buried and transformed by heat and pressure. Since these fuels require millions of years to form, for human purposes, the supply of fossil fuels on Earth is effectively fixed. This has led to predictions — such as those based on the “peak oil” theory first proposed by geologist M. King Hubbert in 1956 — that the world will experience an economically damaging scarcity of fossil fuels, particularly oil.

However, new technologies for oil and gas exploration and extraction have upended the notion of fossil fuel scarcity: The limiting factor on humans’ fossil fuel use will not be the exhaustion of economically recoverable fossil fuels, but the exhaustion of the Earth’s capacity to withstand the harmful byproducts of fossil fuel combustion .

The limiting factor at present are the eco-chondriac global warming alarmists.

MJBrutus on March 24, 2014 at 6:17 PM

The limiting factor at present are the eco-chondriac global warming alarmists.

MJBrutus on March 24, 2014 at 6:17 PM

I know all about the advances in fossil fuels discoveries. We have upwards of 2 trillion barrels of Oil out in the west recently discovered and much of it can be extracted over time.

I am not arguing we do not have fuels. I am arguing that natural gas is a far less certain venture into the future. It is currently driving a resurgence in American exports of end products and value added feedstocks like plastics and chemicals and fertilizers.

I am wondering why we would put that at risk in order to export it countries who do not want to extract their own. Each additional low cost extracted tranche leaves you one less low cost extractable tranche. Why sell it cheap when we can enjoy the economic rise that low cost energy provides us?

astonerii on March 24, 2014 at 6:23 PM

The limiting factor at present are the eco-chondriac global warming alarmists.

MJBrutus on March 24, 2014 at 6:17 PM

I detest them too. I just do not want the raw resource sold over seas. I am happy to use every bit of it we can in this nation, ship the final products over there. Stay competitive with lower prices. Selling Natural gas overseas gives an absolute 0 probability of lowering natural gas prices. I am pretty certain it also has a 0 probability of not causing an increase in price.
When it is no longer abundant and the price rises, then it rises. I just do not see why we want that day to happen sooner rather than later.

astonerii on March 24, 2014 at 6:26 PM

astonerii on March 24, 2014 at 6:23 PM

I see NG as having some advantages over coal and oil. But no so great as to disallow substitution of other fossil fuels for it if need be for most purposes.

I am not saying we should sell it cheap. I am saying we should let free markets set the price. And again, the “more expensive” tranches remaining will not be so expensive when technology improves. R&D to get at it economically will be the inevitable response by those in the business of extraction. That is how they make their money, after all.

MJBrutus on March 24, 2014 at 6:29 PM

I see NG as having some advantages over coal and oil. But no so great as to disallow substitution of other fossil fuels for it if need be for most purposes.

I am not saying we should sell it cheap. I am saying we should let free markets set the price. And again, the “more expensive” tranches remaining will not be so expensive when technology improves. R&D to get at it economically will be the inevitable response by those in the business of extraction. That is how they make their money, after all.

MJBrutus on March 24, 2014 at 6:29 PM

But then technology should make it less expensive to extract the less difficult. Low energy prices are a huge boon to any economy.

I personally do not see the world energy markets as a free market.

astonerii on March 24, 2014 at 6:32 PM

“Is [coal] an inexhaustible resource?”

blink on March 24, 2014 at 6:30 PM

effectively? Yes, Coal is an inexhaustable resource.

In 2007, the EIA said the U.S. had a “demonstrated reserve base” of nearly 500 billion metric tons of coal, and it regarded 267 million metric tons — enough for 240 years — of that as “economically recoverable.” But an extensive USGS analysis of Wyoming’s Gillette coal field — the nation’s largest and most prolific — released this June determined that of 182 billion metric tons of resources in place, less than 9.16 billion (or 6%) were found to be recoverable under “current technological and economic circumstances.” This compares with an earlier assessment from 2002 by the USGS in which 20.87 billion metric tons were estimated to be recoverable. The USGS engineers, geologists, and economists explain the discrepancy is a result of using an “improved methodology,” which incorporates a new dataset with 10 times as many data points as were used in previous assessments.

8233 years of recoverable resources at today’s technology and prices.

Now, bring forth the natural gas numbers. So I can laugh at you.

astonerii on March 24, 2014 at 6:37 PM

But then technology should make it less expensive to extract the less difficult. Low energy prices are a huge boon to any economy.

But it does. Exxon competes with BP competes with Shell &c. The company that extracts it for the lowest cost reaps the best profits per bbl.

I personally do not see the world energy markets as a free market.

astonerii on March 24, 2014 at 6:32 PM

Why not? Aside from those nations that impose import and export restrictions (and only harm themselves).

MJBrutus on March 24, 2014 at 6:37 PM

They hate America so much that they do and say anything if they think it will emotionally sway anyone.

blink on March 24, 2014 at 6:32 PM

I already proved you hate Americans and American Workers. Prove I hate America. You seem to be the one that will say and do anything. I give actual information that shows I am right.

astonerii on March 24, 2014 at 6:38 PM

astonerii has already stated on other threads that a) there is only 10 years worth of natural gas in the US, and b) if allow to export LNG, prices in the US will rise to match the level of prices in Europe.

He has stubbornly refused to admit that for a US company to make a PROFIT on shipping to Europe (where the market price would undoubtedly drop somewhat if a new player were added to the marketplace) they can pay no more here in the states than Euro market price minus the cost of compressing and shipping.

Compressing and shipping is a substantial expense. If the American market were to reach Euro prices (astonerii’s contention) then USprice=Europrice+shipping would be greater than European market price and no one in Europe would buy it.
This is really basic stuff, that the US market MUST stay substantially lower than the export market, or there is no profit in it, hence no exporting, and that it is a self-regulating system

Have you changed your mind on this since yesterday, asonerii?

Pless1foEngrish on March 24, 2014 at 6:44 PM

MJBrutus on March 24, 2014 at 6:37 PM

And when technology makes them all extract for less the price can go down and increase the prosperity of the whole nation.

As for them not being free markets, you really have to be kidding that you see the world energy markets as free.

The members of the Organization of Petroleum Exporting Countries (OPEC) control the world’s largest and most accessible petroleum resources, and have undertaken a collaborative effort to maximize their collective profits through output restrictions over the past four decades. In this academic analysis, two leading petroleum economists present an overview of the many market failures which exist in the global oil market, and present a comprehensive literature review to reach an academic consensus: the international market for oil is not free.

Let other nations export their energy. Keep ours here and turn it into products using American workers that with low energy and feedstock prices can more easily compete around the world. Why throw away our advantages when we have them?

astonerii on March 24, 2014 at 6:46 PM

And when technology makes them all extract for less the price can go down and increase the prosperity of the whole nation.

Happens all the time.

As for them not being free markets, you really have to be kidding that you see the world energy markets as free.

The members of the Organization of Petroleum Exporting Countries (OPEC) control the world’s largest and most accessible petroleum resources, and have undertaken a collaborative effort to maximize their collective profits through output restrictions over the past four decades. In this academic analysis, two leading petroleum economists present an overview of the many market failures which exist in the global oil market, and present a comprehensive literature review to reach an academic consensus: the international market for oil is not free.

Let other nations export their energy. Keep ours here and turn it into products using American workers that with low energy and feedstock prices can more easily compete around the world. Why throw away our advantages when we have them?

astonerii on March 24, 2014 at 6:46 PM

Sure, OPEC is a supply cartel. However, there are enough non-OPEC competitors to take up the slack of their restrictions so that they cannot drive prices up for long. When they do, the price spikes sends a signal to non-OPEC suppliers to produce more and profit more. That is why OPEC is not charging $200/bbl when world prices are below $100/bbl. If it were not for sufficient suppliers to compete, you would have a good point.

MJBrutus on March 24, 2014 at 6:54 PM

astonerii has already stated on other threads that a) there is only 10 years worth of natural gas in the US, and b) if allow to export LNG, prices in the US will rise to match the level of prices in Europe.

He has stubbornly refused to admit that for a US company to make a PROFIT on shipping to Europe (where the market price would undoubtedly drop somewhat if a new player were added to the marketplace) they can pay no more here in the states than Euro market price minus the cost of compressing and shipping.

Compressing and shipping is a substantial expense. If the American market were to reach Euro prices (astonerii’s contention) then USprice=Europrice+shipping would be greater than European market price and no one in Europe would buy it.
This is really basic stuff, that the US market MUST stay substantially lower than the export market, or there is no profit in it, hence no exporting, and that it is a self-regulating system

Have you changed your mind on this since yesterday, asonerii?

Pless1foEngrish on March 24, 2014 at 6:44 PM

10 years of proven reserves.

273 trillion cubic feet of Natural Gas at a current rate of use of 24 trillion cubic feet and growing ~ 10 years.

I never once stubbornly admitted any such thing, one of my earliest posts on the subject stated that it was the opportunity cost. It has always been that argument. If you are too stupid to understand what opportunity cost is, maybe you should keep your fingers at your sides.

Yes, liquifying and Shipping is a substantial expense and waste of the resource. A large part of the natural gas is exhausted as boil off for shipping. But each step along the way is more profit for the energy producer. Thus, the opportunity cost is not price in Europe – cost to ship it. They make profit on that shipping, they make profit on the liquifying, they do not compress it, they cool it down until it is liquid. So when they look at selling to American Citizens the opportunity cost is the total profit they make from ground to importing port. That can add up to quite a bit more than the national base price of Natural gas.

I have yet to see a study that shows this will reduce the price of natural gas here in America, have you?

astonerii on March 24, 2014 at 6:56 PM

Unfortunately for astonerii, his argument that leaving gas in the ground will somehow produce wealth falls flat in the face of our current reality, which is we ARE leaving gas in the ground and because of that, wealth is NOT being produced.

Really, where is the wealth due to low natgas prices?

In fact, the only robust segment of our economy is the oil and gas extraction industry.

Certain manufacturers would love to have their own gas costs lower, for ingredients or power, but its a trade-off; for lower profits in one small sector vs strong growth and wealth creation in a much larger segment.

Artificially contracting the gas market should be antithetical to a small-government free-market economy.

Pless1foEngrish on March 24, 2014 at 6:59 PM

10 years of proven reserves.

You have no idea what a “proven” reserve is, do you?

Did you manage to google the difference between conventional and unconventional sources yet?

Pless1foEngrish on March 24, 2014 at 7:01 PM

Sure, OPEC is a supply cartel. However, there are enough non-OPEC competitors to take up the slack of their restrictions so that they cannot drive prices up for long. When they do, the price spikes sends a signal to non-OPEC suppliers to produce more and profit more. That is why OPEC is not charging $200/bbl when world prices are below $100/bbl. If it were not for sufficient suppliers to compete, you would have a good point.

MJBrutus on March 24, 2014 at 6:54 PM

Obviously there is not sufficient suppliers. Oil prices are multiples higher than before. It is the ratcheting effect. They got us used to $100 a barrel oil and that is where it will stay. They will adjust the output just like OPEC does to keep the price there. US, Canada, what other free markets are out there for Oil?

astonerii on March 24, 2014 at 7:02 PM

You have no idea what a “proven” reserve is, do you?

Did you manage to google the difference between conventional and unconventional sources yet?

Pless1foEngrish on March 24, 2014 at 7:01 PM

The proven includes unconventional, now go away flea.

astonerii on March 24, 2014 at 7:03 PM

Pless1foEngrish on March 24, 2014 at 6:59 PM

Not very good at reading are you?
I listed several places where low natural gas prices are increasing our economy. Go up and read, instead of being a lazy loser I would appreciate it if you were just a simple loser.

astonerii on March 24, 2014 at 7:05 PM

You’re cute, astonerii.

Going to insist you were not saying that US prices would rise to match European levels? To blink, I believe that was, who tried over and over to get you to add 2+2?

Pless1foEngrish on March 24, 2014 at 7:05 PM

oh noes, he is calling me a loser.

That hurts, and clearly proves the clarity of his intellect and the astounding truth of his arguments.

I guess I’m done.

Pless1foEngrish on March 24, 2014 at 7:11 PM

Going to insist you were not saying that US prices would rise to match European levels? To blink, I believe that was, who tried over and over to get you to add 2+2?

Pless1foEngrish on March 24, 2014 at 7:05 PM

Never said it, I said we would be tied to their dysfunctional market prices. I have always said it was an opportunity cost. Are you going to sell it here where you make X$ or are you going to ship it to Europe where you make Y$? If you can make more shipping to Europe then you will charge Americans that opportunity cost to keep it here for them.

This is why it does not matter how much a barrel of Oil here in the USA costs to produce, when it is turned into gasoline having never left the producer’s ownership, that gasoline is sold based on the opportunity cost of the international price of oil.

astonerii on March 24, 2014 at 7:12 PM

I guess I’m done.

Pless1foEngrish on March 24, 2014 at 7:11 PM

All of you guys easily take that first opportunity I give you to leave because you know you lost. Glad I could help you out of your corner.

astonerii on March 24, 2014 at 7:14 PM

This will mostly be for natural gas pipelined down from Canada and from the Rockies. There is not much a market for gas from the Rockies these days since it was being shipped to the Midwest where Marcellus is located.

For the record, the price is too low and companies that drilled those tight shale wells are teetering on bankruptcy.

We have 250+ wells drilled in the Haynesville shale alone which are sitting shut in because they would lose money.

Kermit on March 24, 2014 at 7:21 PM

Kermit on March 24, 2014 at 7:21 PM

That was my thought on the companies drilling practices. Overdrill when the price was spiked and now begging uncle sam to let them boost the price on Americans.
The American Economy will see the huge amount of natural gas and figure out how to turn it into things. Workers will be hired, industries converted, manufacturing jobs restored and America will be consuming more natural gas in the years to come.

astonerii on March 24, 2014 at 7:30 PM

astonerii on March 24, 2014 at 7:30 PM

The cost real money and $4 per MMBTU is a money loser. You wouldn’t see any of this tight shale crude being drilled if the price wasn’t high. In Texas there is NO drilling for natural gas, except where the formation also contains oil.

Presently, there is a huge glut of natural gas, and that is where most of the about 12 export terminals will be permitted anyway.

Kermit on March 24, 2014 at 7:40 PM

Prediction 2 on West Coast (mostly Canadian natural gas), 2 or 3 on East Coast and about 8 or 9 on the Gulf Coast (TX & LA) will be built. There is not enough infrastructure (pipelines) to get the gas to terminal even with that number.

Kermit on March 24, 2014 at 7:52 PM

Presently, there is a huge glut of natural gas, and that is where most of the about 12 export terminals will be permitted anyway.

Kermit on March 24, 2014 at 7:40 PM

The price not all that long ago was about $3. I understand the fact that at $8 and $9 people were, oooo, ahhhh, but there was no position to figure that those prices were anything more than a spike.
The nice thing about natural gas is that it flows through pipes pretty quickly and efficiently and can cover the entire United States.
If the glut gets over with, and we have these export terminals exporting around 10 trillion cubic feet of natural gas a year. Currently equal to 46% of US Consumption, how much more will Americans have to pay for their natural gas? Would it have been cheaper or more expensive without these exports?
The only time it was higher priced than today was 2004 through 2008. The current prices are the long term trend, arguing that with brand new technology that makes it cheaper than ever to recover natural gas requires higher prices just does not seem to be honest of the industry.

astonerii on March 24, 2014 at 8:04 PM

Kermit on March 24, 2014 at 7:40 PM

There’s a huge 25-mile wide, 120-mile long field of dry gas along the edge of the Guadalupe, Davis and Glass Mountains in West Texas that was being drilled like crazy in the 2005-08 period when natural gas prices were at $8-$10 mcf that’s just sitting dormant for now at $4 mcf. But everyone knows it’s there, and either if extraction techniques lower the cost or the price of natural gas comes back up in the future, they’ll go get it out, and the same holds true of other gas fields across the country.

jon1979 on March 24, 2014 at 8:05 PM

Coos Bay is a really strange place to build something like that, because it’s out in the middle of nowhere. There sure as hell isn’t any natural gas in that area, for instance, and I seriously doubt there are any pipelines going there. So how is the NG going to get there to be liquified for export?

Steven Den Beste on March 24, 2014 at 8:14 PM

astonerii on March 24, 2014 at 8:04 PM

Actually 35 have already been permitted but only to ship to FTA countries, most of which produce natural gas.

We are only going to build a dozen at most.

Kermit on March 24, 2014 at 8:32 PM

Kermit on March 24, 2014 at 8:32 PM

They will build how ever many are necessary to drive American’s back into energy poverty again. That is my take.

astonerii on March 24, 2014 at 8:42 PM

astonerii on March 24, 2014 at 8:04 PM

The glut is going to be around for a few years. We cannot export a whiff until end of next year when Cheniere’s 1st two liquefaction trains are completed.

An LNG export terminal requires a LOT of capital. The compressor for a single liquefaction train require 6 each 34 megawatt gas turbines each driving a very large compressor. Around $14 Billion for the 1st 4 trains and that doesn’t include the existing cryogenic tanks, docks, and pipeline connecting it to the interstate pipelines, which already exist.

Kermit on March 24, 2014 at 8:45 PM

Kermit on March 24, 2014 at 8:45 PM

Its still natural resources going away. I am not going to be happy about it.

astonerii on March 24, 2014 at 9:01 PM

An LNG terminal in Oregon is OK, but it could only import/export in the Pacific. What we need is more LNG terminals along the Gulf and Atlantic coasts, which could export natural gas from the Marcellus Shale formation to Europe, and help impose an embargo against Big Bad Vlad.

Steve Z on March 25, 2014 at 12:42 AM

Because oranges and organic decaying item is the same as natural gas, which keeps for millions if not billions of years. Same thing, no different at all.

astonerii on March 24, 2014 at 5:18 PM

Don’t like oranges?

Ok, so no COAL exports?

We both shouldn’t use it here AND shouldn’t export it for money… instead we should punish ourselves for even HAVING coal, right?

Heck I probably should be punished for even knowing coal exists.

gekkobear on March 25, 2014 at 3:16 PM

As long as Russia is taking a page from OPEC’s playbook, subjecting his customers to political blackmail, we might as well take a page from Ronald Reagan’s playbook: Produce our own fuel, and help our friends do likewise to break the monopoly.

ReggieA on March 25, 2014 at 5:25 PM